Know your Buddy Volume. He is important along with price as
He will show whether the price is accepted or rejection. Any pattern classical
can get different success rate when coupled with volume.
We see some volume example and how success of HnS is
improved with it.
First lets know how volume should be interrupted in simple
terms
In the above fig you can see how the price was making new
highs with the left side showing that volume is also rising along with the price.
In this kind of scenario one can conclude that this is a healthy run
In the fig right you can see no new volume participation,
meaning it can reverse any time. So need to part book or close the existing
position for safety.
Does this work in market? why not let’s see
See how a pullback rally got highs rejected by volume and
stock break down
SBI another volume acceptance and rejection example.
What about commodities and instrument? Can volume can be
used there?
Why not as long as the instrument is liquid (more activity)
volume can be used.
Now how to improve the success of HnS with volume ?
See how the volume was low in the stock for some time then
suddenly when neckline broke it immediately picked up.. so used the volume
spike for confirmation and select the stock
As said earlier not all patterns are equally created.
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